Here’s Why Now Is the Perfect Time to Invest in Off-Plan Property

Reece Pape

Reece Pape

RWinvest Property Writer

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Property Investment

While many may have hoped that the relatively calmer stock market conditions and recent 45p tax U-turn would result in cheaper new mortgage deals, so far, the opposite has happened.

Currently, major mortgage lenders are increasing the cost of home loans, with an average two-year fixed mortgage deal at 5.75% — up from 4.74% on the day of the mini-budget.

Lenders across the UK have also been pulling their mortgage products in response to the fluctuating value of the pound and the looming threat of further interest rate increases from the Bank of England.

As a result, it is estimated that around 1,000 mortgage deals have been withdrawn from the market. Simply put, right now is a difficult time for those looking to secure a mortgage.

In times like these, where should those with the means look to invest their money? With difficulty obtaining a buy to let mortgage, is property investment still worth it?

Well, the good news is that for those keen to make high returns on their investments, buying property is still a highly lucrative option.

Off-plan property, in particular, offers an excellent opportunity for buy to let investors right now – even more so than usual. Here’s why.

Consider Off-Plan Property

Rather than letting your money lay dormant in savings accounts – where it will most likely depreciate in value and see hardly any significant interest – you should consider investing in property right now.

More specifically, investing in off-plan property, particularly at this point in time, might just be the best route to take.

Off-plan property investment essentially involves buying a property while still in the planning or construction stages.

These types of investments have proven to be a great choice for investors in this current climate, owing to their lower price points and solid rental yields.

Off-plan properties are also more likely to increase in value significantly over time compared to an already completed property. This is because the price you pay to purchase the property (usually at a below-market rate) will inevitably increase in line with market growth by the time the property is completed.

Rather than using a deposit to secure a buy to let mortgage and potentially enduring the wrath of high-interest rates, you can use the cash you would spend on a mortgage deposit, to secure an off-plan property.

This is thanks to the exclusive payment plans that are available with many off-plan investments.

For instance, you could secure an off-plan property with a deposit of as little as 15% of the property price. Depending on the payment structure and when you get started, you could then not pay again until several months’ time.

Such is the case with Liverpool development Central Park, where buyers can secure a 2-Bedroom property with a 15% deposit and won’t have to pay again until February 2023.

Off-Plan Property Investment

To summarise, here are some key reasons to invest in off-plan property right now:

  • Off-plan properties have historically been known to increase in value significantly. By putting your money into this tangible asset, you could see enhanced capital appreciation and higher rental returns than the market is currently seeing, before the property is even complete. Properties in the North West have been predicted to grow in value by an average of 24.3% by 2026.
  • With inflation at an all-time high of over 8%, many investors are choosing not to keep their money in the bank, and instead investing in off-plan property to avoid their funds being eroded by inflation. This is because they feel that this is a better way of maximising their investment returns.
  • You don’t need a mortgage with off-plan property. If you have 15% or 20% of the overall property price now, you can secure an off-plan unit and pay the rest of the property amount at a later date.
  • An added benefit of investing in off-plan property is the fact that you’re able to cherry pick the best units in a new development. This means you can buy an apartment with the best views and most spacious layout, which will boost rental demand once the property is complete and allow you to generate even higher rental returns.

But Will the Property Market Survive?

Throughout history, the property market has found ways to remain resilient in times of turmoil – and it is possible that now could be a good time to negotiate a better deal on an off-plan property.

Unlike other sectors of the UK economy, the housing market has historically proven to be consistently stable in the long term. This is because housing is a physical asset which has demonstrated growth in value over a number of years.

Though buy-to-let mortgages are currently quite difficult to navigate, and the value of the pound is becoming uncertain, property – more than any other asset – offers viable workarounds to assist investors in making the most out of their ventures – in spite of the biggest challenges.

For example, the drastic falling value of the pound last week may have left many uncertain about the future of the UK market; but it also provided a unique opportunity for international investors, allowing them to potentially invest for less money than before the pound began to drop, owing to this decreased GBP value making UK investments comparatively cheaper overall.

As well as this, throughout the pandemic – despite some challenges – the rental property market generally remained strong and reliable, with the height of the COVID-19 pandemic in 2020 even seeing house prices rise at their fastest rate since 2016.

At this point, projections for house prices and yields remain strong due to the ongoing demand for properties from both renters and buyers.

Again, those that wish to make the most out of their investments – especially those interested in off-plan property – should consider getting involved now to ensure the best results.

If you want to learn more about the housing market’s current state or begin your journey into investing in UK property, contact our industry-best sales team today.

And, for those interested in off-plan properties, check out an exclusive RWinvest opportunity and learn more about Central Park.

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RWinvest - Disclaimer
Reece Pape

Reece Pape

Reece Pape is a property writer at RWinvest. Reece is passionate about keeping property investors updated on must-have information and housing market news

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